Never fully restored...

I have been having issues with my ipod and i really wanted to start fresh again.
But everytime i restore my ipod it never fully restores.
Like i will restore it, the itunes thing will come up, and then i go to restore with a different firmware, itunes says it cant restore error (1)
so i finally got it to restore, and i think i have it in a different firmware, but it comes back up as everything with all of my apps, settings and everything. like it never really restored.

what is the problem?
how can i get it to fully restore. so i can have a empty ipod.

(btw, i am in fw 1.1.4 and i used that newish one step jailbreak deal)

"An unknown error occurred (1)"
This error is can be caused by being in the wrong restore mode when tring to downgrade 1.1.3.
The correct 'Force Restore Mode' Should NOT have the connect to iTunes image on the screen.

1. Make sure your ipod is on and at the Main Menu.
2. Plug your iPod Touch into your computer.
3. Press and hold the home button and the sleep/wake button.
3. Count to 10 and then release the sleep/wake button but contiune to hold the home button.(you will need to hold the home button down for 20-30seconds)
4. In few seconds you will see the iPod show up in iTunes(note: The screen of the iPod should be Black, If its showing the connect to iTunes image you held the power button for too long).
7. Now just click the restore button and wait(Note: If you would like to go to an older firmware when you restore hold Shift while clicking restore and locate the firmware file.)